4.9rated Check a Vehicle
Check a Vehicle

Buyer’s guide

How to check if a car has finance owing

When a car is bought with a secured loan, the debt is tied to the car, not just the person. If it isn’t paid off when the car is sold, the next owner can end up with the problem. Here’s how to check, and what to do if the answer is yes.

Why finance owing matters

Most car loans are secured against the vehicle. The lender registers its interest on the national Personal Property Securities Register (PPSR) against the car’s VIN. If the borrower sells the car without paying off the loan, the lender’s interest can stay attached to the car, and in some cases the lender can repossess it from the new owner, even though the new owner paid in full.

How to check for finance owing

  1. Get the VIN from the seller and check it against the car itself. Where to find the VIN.
  2. Run a PPSR check on that VIN. It shows whether any security interest is registered against the vehicle, and who registered it.
  3. Check the vehicle description on the result matches the car in front of you, so you know you searched the right VIN.
  4. Run it again on the day you pay. A loan can be registered at any time, so a result from last week can already be out of date.
  5. Keep the certificate with your receipt and transfer papers.

A free rego check won’t show finance. State registration checks show whether the rego is current, not whether money is owed on the car. Only a PPSR search shows registered finance. What a rego check shows.

What to do if the check shows finance owing

Finance owing doesn’t always mean the sale is a scam. Plenty of honest sellers still have a loan on their car. What matters is that it’s paid out and the security interest is removed before the car becomes yours.

  • Don’t pay the seller yet. Tell them what the check shows and ask how they’ll clear it.
  • Ask for a payout letter from the lender showing the amount needed to close the loan.
  • Consider paying the lender directly. With the seller’s written agreement, part of the price can go straight to the lender to pay out the loan, with the balance going to the seller. Confirm the lender’s details yourself, using contact details from its official website.
  • Get written confirmation that the loan is paid out and the security interest will be removed from the PPSR.
  • Run a fresh PPSR check to confirm the interest is gone before you take the car.

Walk away if the seller won’t deal with the finance, gets defensive, or asks you to just trust them. There are always other cars.

Already bought a car with finance owing?

If you’ve found out after buying, or a lender has contacted you, act quickly and keep everything in writing.

  1. Gather your paperwork: the receipt, the ad, messages with the seller, the transfer papers and any PPSR certificate you got before buying.
  2. Contact the lender that registered the interest. Ask what it’s claiming, and tell it when and how you bought the car.
  3. Contact the seller in writing and ask them to pay out the loan.
  4. Get advice. The national law on security interests can protect a buyer in some situations, for example depending on whether the interest was properly registered against the VIN when you bought, and whether you searched the PPSR before buying. Whether it applies to you depends on the details. Your state’s consumer affairs or fair trading office, a community legal centre or Legal Aid can help you work out where you stand.
  5. Report fraud to the police if the seller knowingly sold you the car without disclosing the loan.

For official information on searching the register and buyer protections, see the PPSR website, run by the Australian Financial Security Authority.

Finance owing questions

Can a car be repossessed from a new owner?

In some cases, yes. If a lender’s security interest stays attached to the car after it’s sold, the lender may be able to repossess it from whoever owns it. Running a PPSR check before you pay, and keeping the certificate, is the best way to protect yourself.

Does a PPSR check show how much is owing?

No. It shows whether a security interest is registered and who registered it, but not the amount. Ask the seller for a payout letter from the lender to see what’s needed to clear it.

Can I check for finance owing for free?

Free state rego checks don’t show finance owing. To see registered finance you need a PPSR search, which you can do with the government register directly or through a provider like CarCheck AU, which emails the certificate to you.

Do I need to check for finance if I buy from a dealer?

The risk is much lower, because licensed dealers are generally required to give clear title. A check is still a quick way to confirm the car’s written-off and stolen status for yourself.

Check for finance owing before you pay.

Where do I find my VIN?
Official PPSR dataSecure paymentReport emailed to you